Schmidli v. Pearce

APPEAL from a judgment of the Superior Court of San Joaquin County, Lauren P. Thomasson, Judge. Reversed. (Super. Ct. No. CV030409).

The opinion of the court was delivered by: Nicholson, J.

CERTIFIED FOR PUBLICATION

Plaintiffs brought this quiet title action to extinguish a lien of deed of trust held by defendants against their property. Plaintiffs claim the defendants‟ lien expired under a 10-year statute of limitations triggered by defendant‟s recording of a notice of default. Defendants‟ claim their notice of default did not trigger the 10-year statute, and their lien remains viable under a 60-year statute of limitations.

Two appellate decisions addressed this issue and reached different results. Slintak v. Buckeye Retirement Co., L.L.C., Ltd. (2006) 139 Cal.App.4th 575 (Slintak) concluded a notice of default triggered the 10-year statute. Ung v. Koehler (2005) 135 Cal.App.4th 186 (Ung) determined a notice of default did not trigger the 10-year statute where the notice was recorded after the 10-year period had expired, and the 60-year statute applied.

The trial court here relied upon Slintak and granted summary judgment in favor of plaintiffs. Although the notice of default in this case was recorded before the 10-year period expired, we conclude Ung is the better reasoned authority applicable here, and we reverse the judgment.

FACTS

By means of a cashier‟s check dated April 22, 1986, Mary Pearce loaned $40,000 to her brother, Robert Maple. On January 11, 1990, Mary recorded a deed of trust securing the debt. The deed of trust identified Robert and his wife, Stella Maple, as trustors, and Mary as the trustee. It encumbered real property owned by Robert and Stella located at 1048 and 1050 East Indiana Street in Woodbridge, California. The deed did not include a copy of an underlying promissory note, nor did it indicate the date the obligation matured.

On January 11, 1994, Mary recorded a notice of default. The notice indicated Robert and Stella owed $65,760 "as of December 22, 1993." The notice stated all sums secured by the deed of trust were immediately due and payable, and that Mary intended to cause the real property to be sold to satisfy the debt.

However, after recording the notice of default, Mary took no action to foreclose nonjudicially upon the property. No notice of intent to preserve the security interest was recorded pursuant to Civil Code section 882.020, subdivision (a)(3).

Stella Maple died in 1999, Mary Pearce died in 2000, and Robert Maple died in 2003. Mary‟s interest in the loan and deed of trust passed to her children, defendants Rodney Pearce, Mary Hall, and John Pearce. (John Pearce is not a party to this appeal.) Robert‟s interest in the real property passed to his children, plaintiffs Nancy Schmidli and Patrick Maple, and their spouses.

PROCEDURAL HISTORY

On August 31, 2006, more than 12 years after the loan matured according to the date stated in the 1994 notice of default, plaintiffs filed this action against defendants to quiet title and to obtain a declaration that the deed of trust had been extinguished.

Plaintiffs moved for summary judgment. They claimed enforcement of the deed of trust was barred under a 10-year statute of limitations contained in Civil Code section 882.020, subdivision (a)(1), as that statute read prior to January 1, 2007.*fn1 Under that statute, the lien of a deed of trust expires 10 years after the last date fixed for payment of the debt if that date "is ascertainable from the record[.]" (Former § 882.020, subd. (a)(1); Stats. 1982, ch. 1268, § 1, 4676, italics added.) Plaintiffs claimed the "record" included any recorded document that disclosed the debt‟s maturity date, including a notice of default.*fn2

Defendants argued enforcement was not barred, claiming a 60-year statute of limitations found at former section 882.020, subdivision (a)(2), applied. Under that subdivision, if the last date fixed for payment of the debt "is not ascertainable from the record," a lien of a deed of trust expires 60 years after the date the deed of trust was recorded. (Former § 882.020, subd. (a)(2), italics added.) Defendants argued the "record" was limited to the recorded deed of ...

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